# How do you apply a risk-based approach in CDD?

**URL:** <https://www.amlfaqs.com/t/how-do-you-apply-a-risk-based-approach-in-cdd/211>\
**Category:** Singapore\
**Created:** [October 9, 2024, 10:09am UTC](https://www.amlfaqs.com/t/how-do-you-apply-a-risk-based-approach-in-cdd/211 "2024-10-09T10:09:15Z")\
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**Author:** ![pathik](https://yyz2.discourse-cdn.com/flex010/user_avatar/www.amlfaqs.com/pathik/32/5_2.png) [@pathik](https://www.amlfaqs.com/u/pathik)\
**Post date:** [October 9, 2024, 10:09am UTC](https://www.amlfaqs.com/t/how-do-you-apply-a-risk-based-approach-in-cdd/211/1 "2024-10-09T10:09:15Z")

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How do you apply a risk-based approach in CDD?

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<div class="post-metadata">

**Author:** ![pathik](https://yyz2.discourse-cdn.com/flex010/user_avatar/www.amlfaqs.com/pathik/32/5_2.png) [@pathik](https://www.amlfaqs.com/u/pathik)\
**Post date:** [October 17, 2024, 5:30am UTC](https://www.amlfaqs.com/t/how-do-you-apply-a-risk-based-approach-in-cdd/211/2 "2024-10-17T05:30:00Z")

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Upon customer risk Assessment, a business can classify its clients into high-risk customers, medium-risk customers and low-risk customers. Adopting a risk-based approach in Customer Due Diligence (CDD) means tuning the gravity of due diligence measures based on the customer’s risk profile.  
Hence, for a high-risk customer, businesses must perform an Enhanced Due Diligence (EDD). For a medium-risk customer, businesses can perform Standard CDD, while, for a low-risk customer, businesses can either go for a Simplified CDD or Standard CDD.

Learn more about implementing risk-based approach in AML compliance with this article on

> **[The risk-based approach in Anti-Money Laundering Compliance](https://amlsingapore.com/the-risk-based-approach-in-anti-money-laundering-compliance/)**
>
> The risk-based approach refers to adopting a methodology where risks are identified, assessed, and managed in accordance with the amount of damage they can cause.